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SOI 2003: Remarkable Resilience
By Marjorie J. Cooper, Ph.D.

There’s no mistaking the fact that 2002 was one of the toughest years in recent memory; yet this year’s State of the Industry issue of The Counselor reveals a promotional products industry with remarkable resilience. Distributors and suppliers harnessed their ingenuity and strong work ethic to not only survive but in many cases thrive in a tough economic environment. The 2003 State of the Industry shows how they did it and provides a glimpse of what we can all do to replicate that success.

With responses from a broad range of regions, company sales volumes and industry experience, we’ve pulled together a host of best practices from suppliers and distributors alike, along with their tips and ideas for staying afloat in a sea of economic uncertainty. We can be encouraged by how well the industry did, and with the implied confidence in the importance of promotional products evidenced by clients, even though many of them were subject to budgetary constraints and cutbacks.

In this issue, we look at competition and market strategies, as well as service options, product emphasis and the many ways clients use promotional products. We examine what worked and didn’t work. A key focus of this year’s SOI report is to look at how various approaches on the part of distributors and suppliers contributed to their sales volume growth and profitability. We also consider the impact of different strategies and tactics on gross profit margin and competitive positioning. Our goal is twofold: 1) to keep you updated on the big picture of what the promotional products industry looks like, as well as how it’s changing and evolving, and 2) to give you information and insight that will make it easier to understand how you stack up against the industry as a whole and help you build a healthier, more successful business.

So Are We Sick or Healthy?

Our position on the industry health scale was down in 2002 (for the second year in a row), but not by much. The good news is that the scale remains tilted toward “robust” rather than “ailing.” Fully one-third of distributors rate the industry as robust, while less than 10% rate it as ailing. Most distributors are on neutral ground. Suppliers are a bit more pessimistic, as always seems to be the case. Nevertheless, nearly 80% rate the industry as robust to neutral, with only a few rating it as ailing.

Overall, both suppliers and distributors say the “recession/economy” had the biggest effect on their businesses in 2002. Not surprisingly, because our experiences so often drive our perceptions, both distributors and suppliers whose sales volume decreased cite the economy as having a stronger effect than those whose sales volume increased.

What do we know about those distributors for whom the economy had little or no effect on business? The majority had an increase in sales volume and an increase in profitability. Their favored market strategy differed little from the majority of distributors: “to focus resources on increasing business from a select number of clients.”

But they do some things more often than the average distributor who responded to our study. They were apt to call on clients more often, send catalogs to clients and spend more time helping clients with their promotional efforts. They also tended to be in the small distributor category – below $500,000 in annual sales.

You’ll find similar “SOI Data-Mining” profiles sprinkled throughout the report, examining a variety of company types, from big-growth firms to price-cutters, international players to family businesses. This year’s State of the Industry has something for everyone – distributors and suppliers; large and small companies; gainers and losers. We uncovered data that caused us to question some practices that people believe in strongly. We also found numbers that confirm some of the “common wisdom” about the promotional products industry. 

We invite you to read, absorb and process all the great information on the following pages. Our editors worked hard to gather and analyze a veritable slew of statistics, conduct interviews and put it all in perspective. As always, if there’s anything we can do to make this report more useful to you, or if you have any questions about the data or our analysis, please drop me a line at marjorie_cooper@baylor.edu 

SOI Data-Mining
What Makes A Successful Salesperson?

What factors make a salesperson likely to sell $500,000 or more a year? As part of this year’s State of the Industry research, we asked industry sales professionals to rate what they considered to be the most important “tools” they needed to achieve success. We zeroed in on those who said their personal sales volume was $500,000 or more a year. Here’s what we learned:

First, who are these sales leaders? Well, 72% of them are men and 28% are women, despite the fact that, overall, respondents to our survey are split almost equally (49% male vs. 51% female).

The majority have responsibilities in their firms beyond just selling – 75% of them are owners/co-owners of their firms; 10% are vice presidents; and 14 % are sales managers. Only one-quarter were strictly salespeople.

The more general sales experience and the more time they’ve spent within the promotional products industry, the more likely a salesperson is to increase his/her annual sales volume. All those who sell more than $1 million a year (and all but one respondent in the $500,000-to-$1-million category) have spent at least five years in sales. And top performers are more likely than the average respondent to devote their selling time primarily to promotional products – 58% of sales leaders say 91% or more of their annual sales come from the promotional products industry vs. 47% of all responding salespeople.

Top performers are also more likely than the average salesperson to be happy with their work situation. A full 71% say they’re “very satisfied” with their company vs. 60% of salespeople across the board. Contentment appears to matter a lot, given that one-quarter of salespeople with the lowest annual sales volume (less than $100,000) rate their level of satisfaction as 3 (neutral) to 5 (very dissatisfied) vs. only 12% of sales leaders who do. 

Of course, one might postulate that high sales volume translates to higher job satisfaction and vice versa. It’s worth noting that top performers have been with their current companies longer than the least successful salespeople – an average of 10 years vs. seven years – perhaps another indicator of the value of satisfaction.

When asked to rate a series of factors in terms of how important they were to high performance, sales leaders rated the top five as follows:

  1. “As a salesperson, I know what is expected of me at work.”
  2. “My associates (fellow employees) are committed to doing quality work.”
  3. “I have the materials and equipment I need to do my work right.”
  4. “At work, I have the opportunity to do what I do best every day.”
  5. “At work, my opinions seem to count.”

On the other hand, salespeople with annual sales volume of less than $100,000 had a different perspective on what was required for high performance. Their top five factors were:

  1. “I have the materials and equipment I need to do my work right.”
  2. “At work, I have the opportunity to do what I do best every day.”
  3. “As a salesperson, I know what is expected of me at work.”
  4. “The mission/purpose of my company makes me feel my job is important.”
  5. “At work, my opinions seem to count.”


SOI: How We Do It And Who Participates

Two questionnaires made up the 2003 State of the Industry survey, a distributor version and a supplier version. The surveys covered a broad range of operational, financial and marketing topics and were sent to all ASI member distributors and suppliers. Responses were forwarded to Dr. Marjorie Cooper, professor of marketing at Baylor University, who then input and analyzed the data using Apian Survey Pro software. Here are some breakouts of respondent data.

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The Counselor's State Of The Industry 2003